You Could Retire Early, Too, If You Weren’t So Basic

One of the things that keeps coming up when I write or talk about early retirement is the idea that it’s only possible under very specific circumstances. That it is out of reach of all but a very lucky few. I really, really disagree. I think it is like the 4 minute mile: it SEEMS impossible, but once you know someone has done it, you break through that mental barrier and start looking for ways to make it happen. (Note: I have never run a 4 minute mile. I’ll get right on that.)

Another issue is that it’s hard to talk about building a passive income business when so many are struggling just to survive. The income disparity between the wealthy and the rest of the world is absolutely appalling. I live in a city where– for the most part– if you are born poor you stay poor, particularly if you are a woman or a person of color. I can’t fix that. I can donate time and money and vote for people who can help make changes, but ultimately there is a giant chasm between me and people who are struggling financially day to day. I can only appreciate the grinding stress of that burden as an observer and an advocate, and I do not dare speak for anyone in that position. I grew up working class, but we always had a lovely, safe place to live and we always had plenty of food.

Having said that, there is an upwardly mobile segment of the population that has a little extra money, and doesn’t know they can translate that into early retirement. Retiring young seems like something unattainable unless you are fabulously wealthy.

It’s not, though.

On paper, I am not particularly wealthy at all. We are at best upper middle class. I could sell every property I own and still not be able to buy a home in the wealthier areas of my city. Making financial choices that allowed me to create a business with a (relatively) low upfront investment was the key to my success. Obviously I am big advocate for buying low end rentals, but the overarching principle is

low input+fast passive return= more financial flexibility

That extra wiggle room snowballs (as long as you don’t immediately blow it on something) as you stop having to pay for emergencies with a credit card you can’t pay off or make hasty, bad decisions because of a financial emergency.

So how do you know you COULD start working toward the goal of early retirement? You can practice extreme frugality in pretty much any income bracket and save at least a few bucks per month, but what is that financial tipping point where you could make changes that are not particularly onerous?

You don’t really know what milk or gas cost, or at least large fluctuations in the price of necessities are not devastating financially

You are able to take a vacation every year

You own a home (or could if you chose)

You have good credit

You are able to pay for services you could do for yourself (lawncare, maid service)

You eat out regularly

If you have the financial freedom to enjoy little (or big) luxuries, you have the financial freedom to start funneling some of that money into retiring young. Take a good, honest look at your finances and let go of societal expectations that you escalate your spending every time you start making a little more money. You are way too smart (and hot! Look at you!) to work all the time. Get creative and set some goals.

It’s not going to happen overnight, but I did some advanced calculations and determined that if you retire in ten years it will be earlier than if you retire in thirty.